TIME TO TEACH ABOUT MONEY

I saw a Dave Ramsey quotation: “Identify your motivation and your passion. Find what you’re good at and become world-class in that area.”

The term “world class” is overused, and I think harmful, making average people like me feel they are failures. Indeed, most of us are average. World class should apply to Olympians, bicycle riders in Le Tour de France, Nobel laureates, best seller writers, and those young people who competed at the IAAF Track Meet I saw today, a few young people who truly are at the top of what they do.

Mr. Ramsey would have done well to have removed the words and replaced them with something like “the best you can possibly be”. That is achievable. World class is not. In standardized math tests when I was young, I was at the 99th percentile. That is fine, except that if there were 10 million students, 100,000 of them were as good or better than I, making me hardly world class.

Where Mr. Ramsey does help is with people who hate their jobs and are poor. Suze Orman does the same thing. Both are good; both are rich; both are famous and charismatic. It would be nice to be charismatic, but one has to have the wiring. It isn’t in me. What I am wired for, however, is math, and I am very opinionated about what we ought to be doing about it.

Key issues today are student loans, houses underwater, insufficient retirement savings, and too many having to live on Social Security, which it was never intended to do. A frightening number of people go bankrupt each year, because we have a subpar health insurance and medical care system in this country. Very few hospitals are “world class,” and saying “Centers of Excellence” does not bring it. Having been on the medical quality front lines, I think I have a notion of what world class might mean, and we are a long, long way from there at the moment. But we can address the financial issues that people face.

We ought to be starting early, in the schools. That won’t cure the problem, but in a generation or two, it would help a lot. Dealing with finances means dealing with ….uh oh…..numbers and math. Yes. If one cannot understand numbers and math, basic math, there is no way one can understand finance. This means that students must be held back from moving to the next grade until they understand the math necessary for the current grade level. If that means that we slow down education to a crawl, and people howl, then let it be so. Let’s do it right, learning one basic lesson of math right away: if you grade children and adults on certain measures, there will be attempts to game the system and make the person or school look good. This happened in Atlanta. If 80% of the students coming to a local community college, which happened in Tucson, have to take remedial math, what exactly were we—and they and their parents— doing for the prior 12 years?

It is time to be honest with math (and other subjects, too). If students can’t pass basic arithmetic, let’s figure out how to get them to learn enough to pass, not game the system, from the teacher’s side and not play “how clever can I be?” from the tester’s side. Certainly, we ought to have enough smart people in academics who know what should be mastered at each grade level. Students are going to need algebra and geometry, too, but basic arithmetic is absolutely fundamental to understanding algebra, and math builds on itself. Fail at the bottom, and there is no way anybody is going to suddenly jump to the top. Other subjects build, too, but few as strongly as does math.

What good does it talk about an emergency fund of $1000, if the concept of a thousand is not understood? Indeed, one of the big problems we face in this country is that few in Congress can comprehend what a billion or trillion is. Comprehension of these numbers is not easy, but it is both essential to know and may be learned.

Students need to learn about interest, where the formulas come from, then simple rules for remembering them. Trust me, one will use it. They need to learn the difference between “the rate of increase” is slowing and “it is decreasing”. These two are not understood by the majority of students I have taught. They need to know the difference between an average and a median. They MUST be able to work with multiplication tables automatically. This cannot be given over to a calculator or be googled. One has to memorize it. Learn something well, and it is no longer memorized. It becomes innate.

I don’t have the answers to learning math. I do know, however, one place where math would become interesting to students and worthwhile: dealing with finance. Everybody wants money. Everybody wants things. Dealing with money requires dealing with numbers. Frankly, if we could teach children enough math so that they could deal with basic finance, we’d be way ahead of the concepts we think we should be teaching them. I could live without teaching many kids algebra if they knew enough division that they knew that 24% interest rates on credit cards led to doubling of debt in 3 years. If they could multiply by 52, they could figure out how much money they spend annually by eating out once a week. If they could multiply by $2000, they would know what dollars per hour wages equalled in a year.

This isn’t and should not be America’s goal for teaching math in the 21st century. We have to go far beyond what I have stated. But if the millions of kids who can’t make change, can’t comparison shop, don’t know what a mortgage is, or understand the basics of investment can learn to deal with these matters, even on a rudimentary level, we would be a lot better off than we are today. I would rather see an improvement for millions than wait for perfection that will never come. No, Mr. Ramsey, these millions aren’t anywhere near world class. They just need to pass the class of basic material THAT EVERY CITIZEN SHOULD KNOW.

Want kids to understand math? They need to work with, and understand, numbers. To me, the best place to start is with finance.